We will not do anything that risks our culture: John Klein, Cognizant Technology Solutions

Behind Cognizant's scorching growth is a lean board led by John S. Klein, 68, helping the company retain its start-up culture, identify new leaders and ensure an effective dialogue between the executive leadership team and board members. In an exclusive chat with ET's Pankaj Mishra & Sriram Srinivasan, Klein talks about the 'board's eye view' of Cognizant.

I have been with them (Cognizant) before they went public, and had less than 1,000 employees. From day one, we have always focused on the quality of people we hire, the quality of training we provide and the values we aspire to as a company. And we have focused less on quarter-on-quarter revenues and instead taken a long view and its very important to us to make sure that we establish the foundation upon which we can grow to become a very large successful company.

When people were enamoured by the outsourcing market in the beginning, our competitors focused on high margins. We never took that road.

We wanted sustained growth over a long period of time. We were at times below our competitors. We invested for the future. We put a lot of time and money into training, creating a bench strength that can be responsive to the customer. We had to work on the mindset. The investment community fortunately gave us that freedom to give them a lower return. The investments we made differentiates us from the low cost provider.

You also seem to be having a much smaller board compared to your rivals. What has been your approach for this?

At a board level, we have kept it small with very experienced people, we have used that board to help guide and support the company. There are people who say the board should have 10-15 people, should have academicians, this and that. But we said that's fine for you but not for us. Because we operate this company almost in a virtual sense. We have people in all geographies. Look at the corporate structure.

At one point, our CEO was in Chennai, our COO was in New Jersey, head of HR was in Texas, head of development was in Boston, and we did not have to get together. We trusted each other an awful lot and we do things remotely to grow the business. We had our staff meeting initially at the Frankfurt airport to get people geographically dispersed to focus on how you grow the business. We have worked diligently not to create bureaucracy. We keep a very flat organisation. We delegate authority and responsibility.

What is a good mix to have between independent directors, executives and promoters?

Because we are so diversified and geographically dispersed and yet operate as a start up, maybe a $6 billion start up, we have to be very responsive. We have a very flat organisation but are very responsive. If we run the company that way, we can't have a large board. It does not work. You can't get people together quickly enough. We want to stay very nimble and achieve as much geographic diversity as possible. It's difficult with different time zones. We get people who have diverse experience in different geographies but can be very responsive.

Some companies have too many executive leaders on the board. Does it make difficult to make timely decisions?

Every company is different. In our case, to have the CEO and CFO on the board is an adequate representation and is less disruptive because the other people are somewhere around the world doing business. We are very result oriented. Get the job done. No one is better than anyone else, everyone has a role to do and we just rollup our sleeves and do it. If we need some expertise, we will pull that expertise in. That may be in wherever they are. Size of the board and who is on the board is never an issue. It's not a question of stature to be on board.

Is there a scope to expand the Cognizant board, especially with some of you now set to retire?

We may add one or two but we are not going to become a 12 member board. We will expand the board and as we do that we will be looking to foreign nationals but in a time zone we can live with. It's a matter of good governance and the age of the board we have. We need to start seeding with younger people who can have overlap with us for three to five years. It's just prudent transition management.

How do you select successors on the board as well as for the leadership team?

We solicit the line management and the board as far as what kind of skills and expertise we need. We have detailed planning sessions - three day every year. We talk to customers, listen for trends etc. We then think if the skills we have lock on to the market expectations. Then we lock on for the rest of time to develop a three to five year strategy and teams are set up to go work on it. We do that every year. We bring in to the session about 15 line managers from around the globe. They head up the work efforts. That sets us the target and strategy.